Vi&s>-b&Y-n  N,  e..  rallfoau^ 


Re.po'i' "\     o  ^-    vo%%t^  1 


Cerm-rrj\  "W  e-e* 


Library 

OF  THE 

University  of  North   Carolina 

This  book  was  presented  by 


Doc.    No.  66.] 


[Ses.   1858-'9. 


Ordered  to  le  Printed. 


Holclen  &  Wilson,  Printers  to  the  State. 


REPORT  OF  JOINT  SELECT  COMMITTEE  TO  EN- 
QUIRE INTO  THE  MANANGEMENT  OF  THE 
WESTERN  NORTH-CAROLINA  RAILROAD. 


HI 


The  joint  select  commitee,  to  whom  was  refered  a  resolu- 
tion of  the  two  Houses  of  the  General  Assembly,  directing 
them  to  enquire  into  the  management  of  the  Wesrenr  North  M 
Carolina  Rail  Road  Company,  submit  the  following  report : 

The  committee  have  not  had  time  to  make  anything  like  a 
thorough  examination,  of  either  the  financial  condition,  or  the 
management  of  the  said  road.  The  facts  which  they  are 
about  to  submit,  have  been  obtained  from  the  statements,  not 
under  oath,  made  by  the  President,  and  Engineer,  and  from 
certain  written  documents  which  accompany  their  report. 
Their  investigations  have  been  confined  ^exclusively  to  part 
that  of  the  road  from  Haile's  to  Morganton. 

It  appears  from  the  reports  and  statements  of  the  Chief 
Engineer,  that  the  estimated  cost  of  the  work,  from  Haile's  to 
Morganton,  was  six  hundred  and  sixty  thousand  dollars,  and 
the  distance  23  45-100  miles.  These  estimates  were  made  in 
1856,  and  submitted  to  the  stockholders  on  the  31st  of  August 
of  that  year.  By  the  provisions  of  the  original  and  amended 
charters,  individuals  and  corporations,  who  were  solvent,  were 
required  to  subscribe  one-third  of  the  estimated  cost  of  the 
work  and  pay  in  cash  5  per  cent  of  the  amount,  by  them 
jQr*  repectively  subscribed,  and  thereupon,  upon  the  certificate 
|j^  of  those  facts  by  the  President  and  Treasurer  of  the  compa- 
ljl£,  ny  under  the  seal  of  the  corporation,  the  board  of  Internal  Im- 


&^ 


2  Document  1$o.  Q6.  [Session 

provements  is  required  to  cause  the  public  Treasurer  to  sub- 
scribe in  behalf  of  the  State  double  the  amount.  On  the  10th 
of  August,  1858,  a  certificate,  stating  that  two  hundred  and 
twenty  thousand  dollars  had  been  subscribed,  as  was  provided 
in  the  amended  charter,  by  the  county  of  Burke  and  by  an- 
other party,  and  that  5  per  cent  had  been  paid  into  the  Treas- 
ury of  said  company,  and  that  the  parties  making  the  sub- 
scription were  abundantly  solvent,  was  made  by  R.  C.  Pear- 
son, Prst,  and  R.  F.  Simonton,  Treasurer,  with  the  seal  of  the 
corporation  attached.  A  copy  of  the  certificate  is  hereto  an- 
nexed, marked  A.  The  facts  in  regard  to  these  subscriptions, 
as  far  as  the  committee  have  been  able  to  ascertain  them,  aie 
as  follows :  In  pursuance  of  the  provisions  of  the  amended 
charter,  a  proposition  was  made  by  the  county  court  of  Burke 
to  the  people  of  that  county  to  subscribe  $100,000  to  the  stock 
of  the  Western  North-Carolina  Railroad,  which  was  rejected 
\>f  a  majority  of  the  qualified  voters.  Subsequently  another 
proposition  was  by  said  Court,  submitted  to  them,  to  sub- 
scribe fifty  thousand  dollars,  and  upon  the  vote  being  taken, 
a  majority  of  the  qualified  voters  cast  their  votes  in  favor  of 
it.  It  was  insisted,  by  those  who  were  opposed  to  the  sub- 
scription that  the  County  Court  of  Burke,  having  submitted 
one  proposition  to  the  people  of  the  county,  and  that  having 
been  rejected,  their  power  in  the  premises  was  ended, 
and  before  any  bonds  were  issued,  a  bill  of  injunc- 
tion was  sued  out,  restraining  the  authorities  of  Burke 
county  from  issuing  said  bonds,  and  that  is  now  pending  in  the 
Supreme  Court.  In  regard  to  the  subscription  of  one  hundred 
and  seventy  thousand  dollars  by  another  individual,  that  in- 
dividual is  Charles  F.  Fisher,  Esq.,  Prst.  of  the  N.  C.  Rail 
Road.  It  was  stated  to  us,  that  frequent  efforts  were  made 
to  obtain  subscriptions  to  prosecute  the  work,  all  of  which 
were  unavailing.  Of  this  there  can  be  no  doubt.  Finally  Mr. 
Fisher,  after  making  other  propositions,  which  were  declined, 
proposed  to  subscribe  the  remainder  of  the  stock  necessary 
to  obtain  the  subscription  on  the  part  of  the  State,  and  take 
the  whole  contract  from  Haile's  to  Morganton  at  the  estimates. 
These  terms  were  accepted  by  the  company,  and  Mr.  F.  sub- 
Scribed  the  stock,  and  the  contract  was  awarded  to  him  on 


H 
*' 


185S-9.]  Document  Xo.  66.  3 

the  10th  of  Jane,  1858,  and  he  entered  into  bond  without  se* 
eurity  to  do  the  work.  The  subscription*  and  the  contract 
were  contemporaneous  and  dependent  acts.  It  is  not  pre- 
tended he  would  have  made  the  subscription  without  the 
contract.  As  there  have  been  some  insinuations  that  the  es- 
timates were  made  specially  with  reference  to  the  contract 
with  Mr.  Fisher,  the  committee  in  this  connection  deem  it 
due  to  truth  and  justice  to  say,  there  is  no  evidence  from 
which  any  such  inference  can  be  drawn.  The  contrary  is 
abundantly  clear.  Whether  Mr.  Fisher  would  be  'abundantly' 
solvent  for  one  hundred  and  seventy  thousand  dollars,  this 
committee  do  not  know,  and  having  no  evidence  before  them, 
are  unable  to  express  any  opinion. 

With  respect  to  the  payments  of  five  per  cent,  upon  the  sub- 
scriptions made  by  the  county  of  Burke  and  Mr.  Fisher,  the 
facts,  as  far  as  the  committee  can  ascertain  them,  are  as  fol- 
lows :  First,  as  to  the  county  of  Burke.  The  chairman  of 
.  the  county  court  drew  a  draft  on  the  county  trustee  for  twen- 
ty-five hundred  dollars.  That  draft  was  not  paid  then,  nor 
has  it  been  since.  Unless  that  draft  was  a  payment  in  cash, 
no  such  payment  upon  the  part  of  the  county  of  Burke  ever 
has  been  made ;  indeed,  as  stated  in  a  previous  part  of  this 
report,  whether  the  county  of  Burke  has  made  any  subscrip- 
tion binding  upon  her,  is  yet  to  be  settled  by  the  judicial  tri- 
bunals of  the  country.  The  majority  of  the  committee  have 
a  very  clear  and  decided  opinion  as  to  whether  there  was  in 
fact,  and  in  law,  any  payment  whatever,  made  by  the  county 
of  Burke,  but  they  refrain  from  expressing  that  opinion,  out 
of  deference  to  one  of  their  number.  In  relation  to  the  paj7- 
ment  by  Mr.  Fisher  of  five  per  cent,  upon  his  subscription 
of  one  hundred  and  seventy  thousand  dollars,  it  is  stated  by 
the  President  of  the  road,  that  on  account  of  previous  transac- 
tions between  the  Company  and  Mr.  Fisher,  they  were  in- 
debted to  him  more  than  the  five  per  cent,  on  his  stock  ;  that 
no  actual  payment  was  made  by  Mr.  F.,  it  being  deemed  an 
idle  ceremony,  to  pay  him  the  amount  which  the  corporation 
owed  him  and  immediately  receive  it  back.  The  original  of 
Mr.  Pearson 's  Tetter  in  relation  to  these  payments  marked  B., 


4  -Document  Xo.  66.  [Session 

is  herewith  submitted,  the  object  of  the  committee  being  to 
do  entire  justice  to  all  the  parties  concerned.  They  also  sub- 
mit a  detailed  statement  of  the  estimates  made  by  the  Engi- 
neer, marked  C.  Of  the  correctness  of  these  estimates,  the 
committee  have  no  means  of  enabling  them  to  form  any 
opinion.  They  are  not  Engineers,  and  if  they  were,  many  of 
the  items  depend  so  much  upon  the  character  of  the  country 
through  which  the  road  passes,  without  an  examination,  they 
would  be  totally  unable  to  judge  of  their  correctness.  They 
will  remark  this,  however,  that  at  the  time  when  the  esti- 
mates were  made,  iron  was  higher  hj  some  eight  or  ten  dollars- 
per  ton,  than  when  Mr.  Fisher  took  the  contract,  which  was  on 
the  10th  June,  1858.  The  estimates  for  the  excavation  of 
rock,  it  will  be  observed,  are  a  little  over  six  to  one  for  the 
whole  estimate  for  that  part  of  the  road.  As  we  have  before 
observed,  this  strikes  us  as  being  large,  larger  than  would  be- 
found  to  be  the  fact  upon  any  railroad  m  the  country.  Again  :■ 
in  regard  to  the  amount  of  iron  for  turn  outs.  It  is  put  down 
at  eight  per  cent.,  and  amounts  to  $11,023,  This  seems  to  the 
committee  as  being  a  very  liberal,  if  not  an  extravagant 
amount  for  that  part  of  the  road.  Of  this,  however,  the 
members  of  the  General  Assembly  are  quite  as  competent  to 
judge  as  the  committee,  unless  they  had  some  data,  upon  which 
to  form  their  opinions. 

In  closing  this  report,  the  committee  feel  it  their  duty  to 
call  the  attention  of  the  General  Assembly  to  the  necessity 
of  providing  some  more  reliable  mode  of  ascertaining,  in  cases 
where  the  State  is  to  subscribe  to  public  works,  upon  the  con- 
ditions that  individuals  and  corporations  who  are  solvent  have 
previously  subscribed,  and  have  paid  in  cash  a.  certain  part  of 
their  subscriptions,  that  those  conditions  have  been  complied 
with  than  now  exists.  "We  understand  the  board  of  Internal 
Improvements,  upon  a  certificate  made  to  them  by  the  Presi- 
dent and  Treasurer  of  the  corporation  with  its  seal  attached, 
that  the  conditions  precedent  have  been  performed,  feel  bound 
to  direct  the  Public  Treasurer  to  subscribe  on  behalf  of  the 
State. 

Now  the  facta  disclosed  in  this  case,  show  how  deficient  the 


1858-'9.]  Document  No.  66.  & 

law  is.  It  may  be,  the  highest  judicial  tribunal  of  this  State- 
will  hold  that  the  subscription' made  or  rather  attempted  to  be 
made  on  behalf  of  the  comity  of  Burke  is  void.  It  may  turn 
ont  in  others,  if  not  in  this  case,  that  the  certificate  of  the 
solvency  of  the  individual  subscribers  is  false.  Yet  according: 
to  the  construction  of  this  charter,  and  others  like  it,  if  an  in- 
solvent man,  not  worth  five  hundred  dollars,  was  to  sub  ;cribe 
two  hundred  thousand,  and  a  President  and  Treasurer  cor- 
rupt enough  to  certify  he  was  solvent  and  had  paid  five- 
per  cent,  in  cash,  could  be  found,  the  board  of  Internal  Im- 
provements would  be  bound  to  direct  the  Public  Treasurer  to 
make  the  subscription  for  the  State.  The  certificate  ought  to' 
be  made  under  oath.  Besides  and  beyond  this,  the  board 
ought  to  have  power,  and  it  should  be  made  their  duty  in  all 
cases  where  they  had  the  least  doubt,  to  examine  and  ascer- 
tain the  binding  obligation  of  the  subscriptions,  the  solvency 
of  the  subscribers,  and  also  whether  the  cash  payments  re- 
quired to  be  made,  were  really,  truly  and  bona  fide  made. 
To  enable  them  to  make  this  investigation,  the-  board  should 
have  power  to  examine  witnesses  on  oath.  There  are  other 
views  in  regard  to  the  management  of  our  public  works,  which 
have  suggested  themselves  to  the  committee,,  but  deeming' 
them  not  within  the  scope  of  the  investigation,  which  they 
were  directed  to  make,  they  refrain  from  any  remarks  upon* 
them. 

Whether  any,  and  if  so,  what  steps  should  be  taken  in  view 
of  the  facts  disclosed  by  this  report  to  protect  the  interest  of 
the  State,  the  committee  deem  it  most  proper  to  leave  to  the 
General  Assembly,  without  any  recommendation  on  their  part. 

All  of  which  is  respectfully  submitted. 

DAVID  OUTLAW, 
for  the  Committee* 


Document  No.  6&.  [Session 


(A.) 

Office  of  the  Western  1ST.  C.  R.  R.  Company,  ) 
Morgan  ton,  N.  C,  August  10th,  1858.       j 

We  the  undersigned  President  and  Treasurer  of  the  Western 
North-Carolina  Railroad  Company,  do  hereby  certify  that 
in  conformity  with  the  provision  of  an  act  of  the  General  As- 
sembly of  North-Carolina,  entitled  "'  an  act  to  amend  the 
act  incorporating  the  said  Western  North-Carolina  Railroad 
Company,"  that  the  sum  of  ($220,000)  two  hundred  and  twen- 
ty thousand  dollars  was  the  amount  determined  on  by  the 
Board  of  Directors  of  said  company  as  necessary  to  be  sub- 
scribed by  private  individuals,  or  by  Counties,  to  carry  out 
and  comply  with  the  1st  and  2d  sections  of  said  amended  act. 
We  further  certify  that  the  said  sum  of  two  hundred  and 
ninety  thousand  dollars  has  been  subscribed  as  provided  in  said 
act  by  the  county  of  Burke,  and  by  another  party,  on  which 
subscription  5  per  cent,  has  been  paid  into  the  treasury  of 
said  Western  North-Carolina  Railroad  Company,  and  which 
said  county  and  party  making  such  subscriptions  are  regarded 
by  the  company  as  abundantly  solvent. 

In  testimony  whereof,  R.  C.  Pearson,  Esq.,  President  of 
said  company,  and  R.  F.  Simonton,  treasurer  thereof,  have 
hereunto  signed  their  names  and  affixed  the  seal  of  said  cor- 
poration, the  day  and  year  first  above  written. 

R.  C.  PEARSON,  Pres. 
R.  F.  SIMONTON,  Treas. 

The  above  is  a  true  copy  from  the  books  of  the  Board  of 
Internal  Improvements. 

GRAHAM  DAYES. 

January  17th,  1859. 


1858-9.]  Document  No.  66. 


(B.) 
Raleigh,  K  C,  Jan.  21st,  1859. 

W.  L.  Steele,  Esq.,  Chairman,  <&c.  : 

Sm  : — I  have  the  honor  in  compliance  with  your  request 
to  furnish  you  with  the  facts  connected  with  the  payment  by 
Charles  F.  Fisher,  Esq.,  of  the  5  percent,  on  1,700  shares  sub- 
scribed by  him  to  the  capital  or  joint  stock  of  the  Western 
North  Carolina  Railroad  Company. 

Mr.  Fisher  had  subscribed  stock  liberally  when  the  books 
were  opened  under  the  original  charter,  and  became  a  con- 
tractor at  the  first  letting  of  contracts  for  a  large  amount  of 
work.  The  company  had  likewise  made  a  contract  with  him 
to  lay  the  tract  from  Salisbury  to  Statesville. 

Most  of  Mr.  Fisher's  work  was  completed,  and  the  residue 
in  much  forwardness  at  the  time  the  additional  stock  was 
taken,  for  building  the  road  from  Halo's  store  to  Morganton, 
and  the  company  was  in  his  debt  more  or  less  from  the  time 
he'  commenced  operations. 

When  Mr.  Fisher  came  forward  to  pay  the  first  instalment 
of  5  per  cent,  on  said  1700  shares  of  stock  before  the  subscrip- 
tion by  the  State,  the  company  owed  him  (as  well  as  I  now 
recollect)  over  $11,000.  I  did  not  consider  it  necessary  to  pay 
over  to  him  $8,500  on  account  of  what  was  due  him,  and  re- 
ceive it  back  at  the  same  instant,  nor  to  require  him  to  go 
through  the  same  forms  with  respect  to  the  5  per  cent,  due 
from  him. 

The  five  per  cent,  on  the  500  shares  subscribed  by  the  coun- 
ty of  Burke,  was  paid  by  a  draft  drawn  by  Thomas  G.  Walton, 
Esq.,  chairman  of  the  county  court,  (by  whom  the  subscrip- 
tion on  behalf  of  the  county  had  been  made)  as  the  county 
trustee,  or  the  person  having  the  custody  of  the  county  bonds, 
and  this  draft  for  $2,500  was  accepted  by  the  treasurer  as  cash, 
and  he  charged  himself  with  the  amount  on  the  books  of  the 
company. 

These  payments  by  Mr.  Fisher  and  by  the  county  of  Burke 


8 


Document  No.  66. 


[1858-J9. 


were  made  before  the  certificate  was  made  to  the  Governor 
and  Board  of  Internal  Improvements,  under  which  the  State 
made  her  subscription. 

I  may  here  add  that  in  the  contract  made  with  Mr.  Fisher 
"for  building  the  road  from  Hale's  to  Morganton,  he  agrees  to 
take  at  par  the  $50,000  of  bonds  issued  by  the  county  of 
Burke  in  payment  of  her  subscription,  so  that  the  transaction 
with  respect  to  the  first  instalment  on  the  Burke  subscription 
was  tantamount  to  a  cash  transaction,  even  if  it  should  be 
held  that  five  per  cent,  in  actual  cash  should  be  paid  to  the 
company  in  such  cases. 

Respectfully  presented, 

E.  C.  PEARSON, 
President   Western  JUT.  C.   R.  R.  Company. 


(C.) 
Estimates  on  23.46  miles  of  the   Western  JST.  C  R.  R.,   for 
which  Charles  F.  Fisher  is  contractor : 

899*463  cubic  yards  of  earth  excavated  +  $17.92,  $101,260.00 

138,520     "          "     of  rock          "           +          80,  110,816.00 
<6,276  cubic  yards  of  arch,  culvert,  and 

bridge  masonry,  +  $6.66, 41,807.75 

5,231  cubic  yards  dry  stone  masonry,  +  $3.30,  . .  17,261.00 

100  feet  lineal  bridge  supporters,  +  $25  per  foot,  2,500.00 

1  small  county  road  bridge, 250.00 

68,836  sills  +  33^  cts.   each,  (post  &  white  oak,)  20,650.71 

$354,545.50 

Contingencies,  10  per  cent,  on  the  above, 35,454.50 

Iron  for  23.46  miles — 833  tons  per  mile,  53  lbs. 

per  yard h  $70  per  ton, 137,795.26 

8  per  cent,  for  turnouts, 11,023.00 

Tracklaying,  +  $500  per  mile, 11,730.00 

8  per  cent  for  tracklaying, 938.40 

Chairs,  spikes,  &c,  &c,  &c, 14,083.34: 

$565,570.00 
Add  for  land  damages, 5,212.00' 

$570,782.00 
JAMES  C.  TURNER, 
Chief  Fngmeer  W.  N.  R.  R. 


mm 


UNIVERSITY  OF  N.C.  AT  CHAPEL  HILL 


00042071667 


FOR  USE  ONLY  IN 
THE  NORTH  CAROLINA  COLLECTION 


